Sophie Curtis

Samsung is facing a challenge as the internet enters a new era and there are signs that it may have peaked as a major force in technology.

Change is constant online. The birth of the web in the 1990s went on to connect about one billion people to the internet, primarily via their desktops; the arrival of the mobile internet in the 2000s put another billion online. Now we are entering the third age, which it is claimed will see 50 billion devices connected to the internet by 2020. The marketers are calling it the internet of things (IoT).

Pick me up: BMW is working on an app that will drive your car to you. Photo: Samsung

Technology companies are competing to become world leaders in the IoT. The market is expected to be worth £250 billion ($490 billion) to the global economy by the end of the decade, according to the UK's Department for Business, Innovation & Skills.

Samsung already has its sights set firmly on the new era. But South Korea's technology powerhouse knows success is not assured; it has just reported its first annual decline in profits in four years.

BMW shows off its suite of climate, entertainment and car functionality controls on a Samsung tablet at CES 2015. Photo: Bloomberg

"The IoT is becoming truly tangible with the products we offer, largely delivered through a set of very clever sensors that have become much more intelligent, and the low-energy Bluetooth devices that will allow these products to talk to each other continuously without being worried about the power base," said Andy Griffiths, president of Samsung UK and Ireland.

Mr Griffiths has worked in the technology industry for 30 years. Born in Australia, he moved to England as a teenager and began his career at electronics retailer Rumbelows. He subsequently moved to Sony, working his way up through the business before joining Samsung in 2005. In December 2013, he became the first non-Korean president of Samsung's UK and Irish arm.

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Over the past 10 years, Mr Griffiths has seen Samsung become a top brand in consumers' eyes. However, in January the company revealed its first slip in annual profits since 2011, due in part to falling smartphone sales. Mr Griffiths said that Samsung needs to keep innovating and listening to what customers want, if it is to remain relevant.

"The rise and fall of tech empires is very dramatic as a sector. It's about brands who are relevant to their time, who understand the consumer of the day," he said. "Even when you are the big brand, it takes a certain type of humility to externalise yourself, and to keep hold of the hunger and the inquisitiveness and the true innovation that made you different in the first place."

The IoT is where Samsung is now focusing its innovation efforts. At the Consumer Electronics Show in Las Vegas last month, Samsung announced that all of its televisions would be IoT devices by 2017. This means that, as well as allowing customers to watch live and on-demand video, and support web-based services like Skype, they will provide a hub of information for other connected devices in the home.

This could include weather data, diary appointments, energy usage, home security or the location of family members. Mr Griffiths said that customers will choose the elements of the IoT that suit their needs, and those will gradually grow into the wider connected home. Software like Tizen — the open-source operating system developed by Samsung for its smart TVs and wearable devices — will help to visualise this information.

"The smart TV has already started to change the way people use their bigger screen," said Mr Griffiths. "Tizen is a platform designed particularly with IoT devices in mind. The idea is that our TVs work very intuitively with other Samsung devices and other open-platform devices that ultimately join this mix, so it's much easier for consumers to connect."

However, Samsung's vision goes far beyond TVs. By 2020, all of its hardware will be IoT-ready — including ovens, fridges, hobs and dishwashers — meaning that they will be controllable from a smartphone, tablet, or even a smartwatch. Thanks to technology developed by SmartThings, a company bought by Samsung in August 2014, all of these devices will be able to "talk" to each other.

The SmartThings IoT platform is open, meaning that even IoT products offered by other companies — such as Google's Nest Learning Thermostat — will be able to integrate with those offered by Samsung. The company is already working with BMW to build IoT capabilities into its electric cars, allowing users to summon their cars from their garage with a tap of their Gear S smartwatch.

"These products are going to set themselves up around your lives, they're going to learn for you, and they're going to make your life easier and more interesting overall," said Mr Griffiths.

Samsung hopes that its strong focus on the IoT will help to turn its fortunes around in 2015. However, the company is not giving up on smartphones, which remain one of its main sources of profit. "In these tech markets, when any of them mature, you do get a correction at first, as you reach this saturation level, and we certainly saw that in 2014 with double- digit declines in the size of the market," said Mr Griffiths.

"Our challenge as a brand is to excite more and more of those people to come back into the market. The point of difference between the phone they have and the latest top-end smartphone has to be fully justified. That will be the consistent challenge for the brands that want to stay ahead in the smartphone business."